ATLANTA-As Republicans scramble to rework the plan to overhaul the state’s tax code, critics say the latest version leaves a $220 million hole in the budget – creating more problems than it would solve.
The bill incorporates pieces of a proposal offered by the tax council created last year by the Legislature, and details of the new version are outlined in a fiscal note from the state auditor’s office dated Wednesday and addressed to House Ways and Means Committee Chairman Mickey Channell.
House Democrats raised concerns last week that the measure could hurt the middle class. The new proposal aims to protect middle and upper-middle class taxpayers by increasing their itemized deductions. Earners with federally adjusted gross incomes of $80,000 for single filers and $160,000 for joint filers would get a lump-sum deduction.
The plan does include taxes for labor for car repairs and on telecommunications services from cable to cell phone text messages. According to the fiscal note, prepared by the Georgia State University Fiscal Research Center, the estimated revenue impact of the plan for next year would be at least $220 million. That estimate decreases to a minimum impact of $180 million in 2013, but skyrockets to $286 million in 2014.
House Majority Leader Larry O’Neal on Thursday touted the plan as one that will promote job creation and keep the state competitive with its neighbors. He dismissed the notion that it would create millions in debt for the state and said the fiscal note does not take into account an economic recovery.